Brazil's Fiscal Deficits To Remain Wider For Longer

• Brazil's fiscal deficit is expected to widen to a historic 18.2% of GDP in 2020 and narrow gradually over the coming years, to 10.0% in 2021.
• Fitch Solutions has revised down its forecasts, from 14.9% in 2020 and 9.1% in 2021 previously, as the Bolsonaro administration has embraced a more open-ended commitment to maintaining elevated social spending in order to maintain his popular approval.
• The government's weakening commitment to fiscal reforms is likely to undermine market confidence in its long-term fiscal sustainability, raising its borrowing costs and potentially creating pressure for consolidation in the medium term.

(Source: Fitch Solutions)